Leaders & Friends Episode 1: Rafael Santana, CEO of Wabtec

Got to start with geopolitical tensions running probably at the highest and broader level than we've seen in our careers. One thing to read in the newspaper what's happening between China, US, Russia, Middle East. The other one is if you're actually competing for business in Central Asia or in Africa. We have a lot of business in a place like Kazakhstan. If you thought one day the president of China could fly into Astana and meet with the president of Russia and the president of Kazakhstan on the same day, well that happened three weeks ago. At that point, you've got things I'll call bundling handouts: 'Just test this 50 locomotives, here is the financing package, and if you don't like it give me a call.' At that point you got to show your very best. You're really taking what I call regionalization to the next level, Jeff. For us at GE, what was in the 80s and 90s moving to best cost countries, last 20 years it was all about regionalization. It's about taking it to the next level. We are today probably one of the largest industrial employers in Kazakhstan outside the oil and gas arena. There's two to three thousand people that have jobs in Astana because we're there. We're there not just to support the country, we're making Kazakhstan compete for exports into Mongolia, into Uzbekistan. They're not competing with some of these countries for exports. But if I take you to a completely different place, in Africa, all of a sudden you're dealing with the fifth largest iron ore project in the world. It's going to be the fifth largest mine, and two-thirds of the capital is Chinese and 100% of the offtake. At that point you got to make sure you are really going back to the track record you've built on delivering the best products, supporting the fleet running in some very tough conditions, making sure that ultimately you're delivering with compliance and integrity. Those are things we never compromised on. Ultimately you might need a friend. He might not be at home, it might be a different government that you partner with to ultimately be able to win. You got to find a path, you got to be very close to your customers and very close to the constituents because you're going to have complex situations, some of which a lot of companies and a lot of governments will shy away from, and you can't leave the door open for the competition.

Jeff, a big piece is developing those teams, understanding those local realities, making sure that those teams own their destinies and providing them the opportunity to develop and grow. You did that yourself, visiting sometimes in Latin America, sometimes in Europe, and having the opportunity to go and visit with some of the presidents of some of these countries, understanding the agenda and the complexity of that, but ultimately making sure that we were developing an agenda and that we had the doors open. The agenda is complex. Populism is out there. What used to be third world problems of countries that were still being developed, well, I guess all countries are this day, so one could make that case. Understanding those agendas, they often really evolve around social, economic, and technology and how it comes together. I think it's developing those teams so they can understand it, they can own it, and ultimately you end up in a partnership with business teams around the world that help you carry the story forward.

Jeff, one thing that remained common with all the moves we've made, we made nine moves as a family, it was the sense we never wanted to leave the place we were at. Including when we were in Italy, it was probably the toughest thing was to convince them to go back to Brazil because nobody wanted to. So it's about coming in, embrace what you have. There's going to be pluses, there's going to be minuses, but you're going to come out as a much better leader. It might not be obvious how much change is happening around you, but once you move into a new culture, a new country, a new business, and you have to deal with a new team, it becomes pretty obvious that it starts with people, it starts with leadership, it starts with really developing a team. That's where the game starts. Next on that agenda is really making sure you have a team that feels accountable, feels responsible, a team that's committed to learn, and a team that's committed to adapt along the way. Whatever three bridges you plan to cross, they're going to be blocked, and you shouldn't waste time on explaining why they're blocked but how are you going to get to the other side. That sense is something that experience going out there provides you. You got to make it work, and it's a step forward, not a step backwards. It's not explaining why it's not working, it's investing all the energy on making it work.

First, rail is the most sustainable way of moving things overland. If you're thinking about freight or large amount of people, this is the most sustainable. That means it's the safest, it's the most environmentally friendly, it's the most efficient way of moving things. So it starts very much out there. If you think about some of the challenges in the world, in a world that needs to move more and transport more, we can use a lot of the existing infrastructure to move a lot more in a much better way. That's where our mission starts. It's an industry that we can continue to advance with a lot of technology. Some of the things that we do here really look not just at what's happening in rail, how we're dispatching trains, it looks at the borders of rail where you have the interfaces in the yards, where you have the interfaces in the ports, and it's understanding that entire ecosystem and making sure that you help it move better. That's where I look at our story. It's about helping the world move in a better way. Rail is very much an essential part. It's lost a lot of share over the last several decades. I think we're really poised to revert that, and I think there's a lot of opportunity for us to help the world with a lot of the challenges that it has with the technologies we have in rail.

Jeff, I think there were a few of those, to be very honest. It goes back to really the things you're learning each time. You asked me about those moves, you learn so much through that process, and you come out of them as a much better individual. If I was to mention one, when I went back to Brazil to run a much smaller P&L than the one I had in North America, it just gave me a much better sense of having really the touch points of an entire business. Even though it's 300 people, I had the unions, I had the suppliers, I had the customers, I had all the elements of the business. With some of the gaps we had in terms of where we were trying to take the business, it just took me a lot deeper on understanding some of the basics of running the business and how all the elements got to come together. So I think that was very important. The fact that I had so many moves, Jeff, and you find yourself sometimes very close to what I'll call failure, it allowed me to have the confidence when GE decided to divest Transportation. I was informed at about 10 AM on a Saturday morning, told about the divestiture. The second question I got asked was, 'Do you want to stay at GE or do you want to go?' It took me no time to say I'm moving on with the business. I knew the team I had. Being appointed CEO only days before, you want to be fully behind it, you're fully vested, you're committed.

Jeff, it starts with, I'll use the word, they got to be great communicators. Good communication is a key element for me in making sure you're bringing a team together. It doesn't go by itself, but it's identifying great leaders and bringing them together in that process. Communications is a key part for me. The second piece is those people got to be passionate about problem solving, but problem solving got to go with making decisions, taking in some cases tough decisions where at your best you might be 60% right. I think that's the other element. The third one, our leaders are passionate about learning. When I talk about learning, I connect it with adaptability, which is that whole notion that you're going to find problems along the way. You spend less time on explaining the problems than you spend on finding a way around them. So I think those are three things I often look for. It's a critical essence of how you keep progressing with the agenda.

Jeff, I'll start with first: put yourself into what I'll call context of forums where you have CEOs that are better than you are in a lot of different things. Just watching them out there, there's a couple forums that I attend. One of them is the HBS forum that happens once a year, and you've got a group of 50 to 60 CEOs there. Watching them, really connecting on one level, understanding a little bit of the story and some of the things they're doing, it becomes a bit more obvious to you some of the opportunities you have in terms of improving. Sometimes it might be simple things like even your ability to communicate with specific stakeholders. It could be down to making sure you're helping the organization move with speed on certain topics where people are not pulling forward as fast as you need. So it's about understanding, selecting some of those topics, being careful on wanting to delegate some of these into the organization versus bringing to yourself. When I started first as a CEO, in my second year as a CEO, one of the things we did was Revel, a company that does a study with your investors. We had some very key questions to our investors about myself, about my CFO, and about my investor relations, and we did get some very direct feedback on things that you have to improve on. For me, it was really back to communications. It was about going back, looking at some of my earnings calls, having people that could help me with, 'Here's how some of the best CEOs do that. Here's how you did this question. Would you like to redo it?' It's working once, twice, it's exhausting, right? You can't feel great about yourself because it's about changing a little bit every day, and you got to take on three months, six months of doing that. So it's about your own commitment to develop yourself, and it's staring yourself in the mirror and selecting, by the time you're here, to improve certain things. It takes a lot of effort and it takes some real discipline to keep doing it.

Super. Thank you.